In this simple knowledge base post I’m going to show you how to create a simple customer growth model for our new startup!
Let’s assume we are starting a new company with 100 customers initially and we expect a growth rate of 3% month on month. The question every investor wants to know the answer to is:
How many customers will you have in 6 months time?
To do this follow the steps below:
Create a new table with a measure called initial customers and give it the value 100
Add a new measure to this table called growth rate and give it the value of 3%
Create a new Table and create a measure called Customers.
- We are going to use the formula COMPOUND. The syntax for it is COMPOUND(Growth Rate, Dimension, Initial value)
- Write the following formula in the Customers Cell as shown below =COMPOUND((1+Table1.Growth Rate),Time.Month,Table1.Initial customers)
- You should see the following table below:
In 6 months time we should have around 116 customers! Win!